Madrid Court Cancels Low Emission Zones Due to Flawed Economic Report

Goodbye to Madrid’s LEZ: TSJM Cancels Centro and Plaza Elíptica

The Second Section of the Administrative Court of the Madrid High Court (TSJM) has annulled the city’s Low Emission Zones (LEZ). The entire ordinance remains valid, but the specific areas defining the LEZ and the two Highly Protected Low Emission Zones, Centro and Plaza Elíptica, are struck down. The rest of the legislation, including future LEZ provisions, remains in force. The court partially upholds the appeal filed by the Vox political group, ruling that the ordinance was invalidated due to an insufficient economic impact report.

What the TSJM annulled and what remains in force

The court rejected arguments regarding procedural irregularities in the ordinance's approval. However, it found a "manifest insufficiency" in the economic impact report, trinc recent Supreme Court doctrine on municipal ordinances. The decision is not final and can be appealed to the Supreme Court’s Third Section, keeping the legal battle open.

Why the rule falls if its purpose is not questioned?

The issue lies in the documentation, not the objective. Magistrates did not question the City Council’s authority to protect health and the environment or its duty to meet pollution limits set by the 2008/50/EC Directive. What was lacking was the assessment of benefits versus costs and less restrictive alternatives, known as the principle of proportionality. This was not done.

The report that ignored those who cannot change their car

The core of the ruling is economic. Restrictions likely affect low-income individuals unable to afford environmentally compliant vehicles. The sentence highlights that this valuation was omitted, despite the 7/2021 Law on Climate Change and Energy Transition mandating a just transition for vulnerable groups. Also missing from the reports were small businesses, self-employed workers, micro-enterprises, and SMEs, whose professional vehicles are affected.

European fines, local fines, and the grace year

Annulment has financial consequences. Spain risks EU fines for failing to meet pollution limits, while respiratory issues persist. Critics argue the LEZ acted as an indirect tax on those who cannot replace their cars, with unconfirmed figures suggesting 300 million euros collected in fines. Meanwhile, the City Council has granted a one-year extension for unclassified cars registered in Madrid, with restrictions set to expand citywide on January 1, 2025.

Madrid as a regulatory exception

The ruling highlights Madrid’s unique regulatory approach: fewer restrictions and tailored taxes. While some see a pattern of interventionism, others note Madrid has finally met European pollution requirements, with smog levels dropping. Neither factor is resolved in court.

Where the matter is stuck

The key question remains: does this kill restriction policies or just the approval method? Theoretically, the economic report can be redrafted and the ordinance re-approved. Practically, it requires defining who pays for the transition. The ball is now in the City Council’s and Supreme Court’s court, with the unresolved debate over whether the rule failed due to procedural defects or a lack of substantive planning.